Bloomberg builds collateral management platform
11 January 2017 New York
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Bloomberg's MARS Collateral Management solution has secured HSBC Private Bank and more than a dozen corporations and financial institutions as clients.
The MARS solution targets the new variation margin requirements for non-centrally cleared over-the-counter (OTC) derivatives for banks, investment firms and corporations, promising to facilitate the collateral management and reconciliation processes needed to adhere to these new requirements.
According to Bloomberg: “These rules are intended to reduce systemic risk, but present costly operational challenges to investors who will need to calculate and post initial and variation margins for all non-cleared trades, classify eligible collateral to post and deal with an increase in margin calls and daily calculations.”
The non-centrally cleared OTC derivatives market is currently valued at $200 trillion.
Bloomberg MARS Collateral Management allows customers to centralise their collateral management workflow and automate how they manage and monitor risk exposure and collateral positions.
It provides cross-product, cross-asset support for US Dodd-Frank Act and European Market Infrastructure Regulation compliance, effective capture of legal documentation, automated messaging, risk analytics, and portfolio reconciliations.
Bloomberg also provides a data licence product and look-up feature on the Bloomberg Terminal that helps investors identify collateral eligible to post in different jurisdictions, as well as aggregation and eligibility checking services for bilateral and triparty repo agreements.
"It's a business imperative to trade these types of instruments, so compliance too becomes a business imperative," said Kpate Adjaoute of HSBC Private Bank.
"We anticipated that these reforms were coming. It helps to centralise the process and have access to the data we need, as well as the counterparties with whom we trade.ˮ
Phil McCabe, global product manager for collateral management at Bloomberg, added: "The challenges investors face in the OTC derivatives market cannot be addressed with software alone.”
"Bloomberg provides the data and analytics to calculate and reconcile margin requirements. We go further by connecting a global network of corporations and investment firms, both large and small, to unify what can be a very laborious, risky and disjointed process.ˮ
The MARS solution targets the new variation margin requirements for non-centrally cleared over-the-counter (OTC) derivatives for banks, investment firms and corporations, promising to facilitate the collateral management and reconciliation processes needed to adhere to these new requirements.
According to Bloomberg: “These rules are intended to reduce systemic risk, but present costly operational challenges to investors who will need to calculate and post initial and variation margins for all non-cleared trades, classify eligible collateral to post and deal with an increase in margin calls and daily calculations.”
The non-centrally cleared OTC derivatives market is currently valued at $200 trillion.
Bloomberg MARS Collateral Management allows customers to centralise their collateral management workflow and automate how they manage and monitor risk exposure and collateral positions.
It provides cross-product, cross-asset support for US Dodd-Frank Act and European Market Infrastructure Regulation compliance, effective capture of legal documentation, automated messaging, risk analytics, and portfolio reconciliations.
Bloomberg also provides a data licence product and look-up feature on the Bloomberg Terminal that helps investors identify collateral eligible to post in different jurisdictions, as well as aggregation and eligibility checking services for bilateral and triparty repo agreements.
"It's a business imperative to trade these types of instruments, so compliance too becomes a business imperative," said Kpate Adjaoute of HSBC Private Bank.
"We anticipated that these reforms were coming. It helps to centralise the process and have access to the data we need, as well as the counterparties with whom we trade.ˮ
Phil McCabe, global product manager for collateral management at Bloomberg, added: "The challenges investors face in the OTC derivatives market cannot be addressed with software alone.”
"Bloomberg provides the data and analytics to calculate and reconcile margin requirements. We go further by connecting a global network of corporations and investment firms, both large and small, to unify what can be a very laborious, risky and disjointed process.ˮ
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